Here's Why The Brown Capital Small Company Fund is Re-Evaluating Bio-Techne's (TECH) Long-Term Growth Profile

Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The small-cap US stocks rebounded in the second quarter following a challenging first quarter. The Small Company Fund returned 8.59% in the second quarter, lagging the Russell 2000® Growth index’s 11.97% return. The underperformance in the quarter occurred in the last few weeks of the period. In addition, check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, The Brown Capital Management Small Company Fund highlighted stocks such as Bio-Techne Corporation (NASDAQ:TECH). Bio-Techne Corporation (NASDAQ:TECH), with a market capitalization of $7.973 billion, develops, manufactures, and sells life science reagents, instruments, and services for the research and clinical diagnostic markets. The one-month return of Bio-Techne Corporation (NASDAQ:TECH) was -3.81%, and its shares lost 31.43% of their value over the last 52 weeks. On September 12, 2025, Bio-Techne Corporation (NASDAQ:TECH) stock closed at $51.26 per share.

The Brown Capital Management Small Company Fund stated the following regarding Bio-Techne Corporation (NASDAQ:TECH) in its second quarter 2025 investor letter:

"Among the detractors to performance in the second quarter of 2025 were Bio-Techne Corporation (NASDAQ:TECH) and RxSight (RXST).

Bio-Techne develops, manufactures and sells life-science instruments and solutions, such as proteins, antibodies and reagents, for cell- and gene-therapy research and clinical diagnostic markets worldwide. Bio-Techne considers itself a life-science supermarket with a broad scale of solutions and tools, including 6,000 complex proteins and 40,000 antibodies. The company is organized into two divisions. The Protein Sciences division, accounting for roughly 76% of revenue, sells proteins, antibodies, immunoassays and protein-analysis solutions. The Diagnostics and Genomics division, 24% of revenue, sells clinical chemistry controls, reagents, molecular diagnostic assays and liquid biopsy kits. Roughly 20% of the company’s revenue is generated from instrument sales, while 80% is from consumables, yielding solid recurring revenue in a razor/razor blade business model.

During the second quarter of 2025, Bio-Techne’s share price fell after the company reported mixed fiscal third quarter 2025 results, slightly lower-than-expected total revenue growth and lowered next-quarter guidance. The Protein Sciences division results were better than expected due to continued improvement in large pharma, up low double digits, while biotech continued to be hampered by a weaker funding environment and macro headwinds. The Diagnostics and Genomics division results were lower than expected due to timing issues with large orders for diagnostic reagents. In both divisions, weakness in capital spending and lower grant funding from National Institutes of Health (NIH) also hurt revenues. Total operating margins were better than expected due to higher volume and solid cost management. The company lowered its next-quarter guidance for revenue growth due to macro uncertainty and tariff headwinds that could impact large pharma. Although Bio-Techne’s end markets should improve, enabling the company to generate low teens earnings growth, we are re-evaluating the company’s long-term growth profile."

Bio-Techne Corporation (NASDAQ:TECH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 37 hedge fund portfolios held Bio-Techne Corporation (NASDAQ:TECH) at the end of the second quarter, compared to 34 in the previous quarter. In the fiscal fourth quarter of 2025, Bio-Techne Corporation (NASDAQ:TECH) generated $317 million in revenues, up 3% year-over-year on an organic basis and 4% on reported basis. While we acknowledge the potential of Bio-Techne Corporation (NASDAQ:TECH) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Bio-Techne Corporation (NASDAQ:TECH) and shared Baron Asset Fund's views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.